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By Noel Young, Correspondent

June 29, 2012 | 5 min read

Rupert Murdoch has told Fox TV in a interview why he finally agreed to separate the print business from News Corporation's TV and entertainment operations. The newspaper business in the future, particularly online, could even be expanded, according to a report in the Wall Street Jornal, currently a sister company of Fox within News Corp.

Possible targets some commentators thought could be the Los Angeles Times, and the Chicago Tribune, now emerging from bankruptcy. And there could also be a role for eldest son Lachlan.

The TV interview was part of a mini-media blitz, largely within the News Corp family. The Wall Street Journal - Murdoch's 's last big newspaper acquisition - said Murdoch would be chairman of both companies. News Corp's current COO, Chase Carey, will have the same title at the entertainment company. It has not been decided who will run the publishing company.

In the TV interview Murdoch said he would not be pursuing the BSky B bid. He would rather invest his dollars in America than in Britain. But that was nothing to do with what had happened, "just the English.'" he joked.

On a conference call, Murdoch said the publishing company would have a "robust net cash position" so that it could make "the right investments." He said he was keen to expand the digital side of his various newspapers and continue to charge readers for content.

"People will pay for news," he said. "It is the most valuable commodity in the world."

Murdoch would like to consider publishing acquisitions, said the WSJ - but they weren't his first priority. "I want to be successful and confident…before I go out and look for other newspapers," Murdoch said in an interview.

The separation is expected to be completed in 12 months.

Murdoch had long resisted suggestions that the company's newspaper assets be spun off because they were dragging down the stock.

"I was hanging on, and so was the whole family," the 81-year-old Mr. Murdoch said in the interview . "We were very emotional about it....I went through lots of ups and downs."

What helped change his mind, said the WSJ, was a perception that the entertainment and publishing businesses had become so different that they needed separate management teams. While entertainment is surging, the publishing business faces challenges.

With the purchase of The Wall Street Journal in 2007, executives realised the publishing company had a global brand that could allow it to stand alone.

Separating publishing could even allow him to acquire more newspapers, without facing the wrath of shareholders, said the Journal, quoting a person familiar with his thinking.

Murdoch was said to have wrestled with the split for much of the spring. In early May, shortly after the findings of the Parliamentary inquiry into the phone-hacking scandal, he flew to his ranch in Carmel, California , for a 10-day break to think things over.

Several News Corp. executives were invited to the house, where they discussed business, including a possible split. Still, back in New York, he told executives that he was "leaning against the proposal". The turning point was a board meeting in Milan on June 12 at the offices of Sky Italia, said the WSJ.

Murdoch had by then become more convinced by the logic of the split. Discussions went on for several hours and people left the meeting with a distinct feeling: "This time, it's not a fire drill. It's going to happen," said the WSJ.

Movie and TV assets, including Twentieth Century Fox, the Fox News cable channel and Fox broadcasting will stay together.

Murdoch said he planned to make digital investments to stabilise the publishing business before launching into acquisitions.

People familiar with the situation said Murdoch has long eyed titles such as the Los Angeles Times, whose parent company, Tribune Co., is due to emerge from bankruptcy.

But in the interview, Mr. Murdoch played down an interest in the paper, saying it would have to be looked at "closely," because of regulatory restrictions, among other things.

Murdoch said the phone-hacking scandal scandal, which he has called a "major black eye" on the company, had "absolutely nothing" to do with the decision to spin off the publishing operations.

He dismissed the idea of his son Lachlan potentially coming back into the fold as CEO of the publishing company.

"That specific role is not on the agenda but I certainly hope that Lachlan will return to the company," although not necessarily on the publishing side, sai Murdoch.

The Journal quoted a former executive, "I'm sure that Rupert thinks he can save the newspaper business. If he has the opportunity to do it, he would probably take it."

FOOTNOTE: Murdoch made his "Just the English" remark In a part of the interview not seen in the You Tube clip above - but available on the Fox News website - Murdoch said, "that the decision to split his media empire into two companies had "nothing at all" to do with the phone hacking scandal in England.

Rather, Murdoch told FOX Business anchor Neil Cavuto, “It’s what’s best for our company and our shareholders.” A divided company, he said, will be “a lot better in every way … better managed.”

He wouldn't be pursuing the BSky bid and would rather invest his dollars in the US. than in Britain - but that was nothing to to do with recent events "just the English," he added.

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